Investor Demand for Silver Projected to Remain Strong


"Last year, investors bought 209.7 Moz. of silver on a net basis."

Strong investor demand pushed silver prices higher in 2009 and that trend is likely to continue in 2010, CPM Group said Tuesday in its Silver Yearbook 2010.

CPM's annual Silver Yearbook discusses in detail shifts in investment demand for silver in 2009, along with the most-likely trend for investment demand for silver this year. Investors worldwide have been buying large volumes of silver for four years on a net basis. Last year, investors bought 209.7 million ounces of silver on a net basis.

"This was the third largest amount of annual net silver purchases on record, surpassed only by the 222.2 million ounces purchased in 1980 and the 226.0 million ounces estimated to have been added to investor holdings in 1968," the metals consultancy said in a news release on the Yearbook. "CPM Group projects that investor demand will remain high in 2010, totaling 213.9 million ounces."

Silver Yearbook 2010 was released at Bloomberg headquarters in New York City. The yearbook noted, as the financial market crises unfolded in late 2008, silver prices plunged to $8.79, on October 28, 2008. Silver had recovered slightly by the start of 2009. Silver settled at $11.49 (for the nearby active Comex futures contract) on January 2, 2009. Prices fell back to $10.44 on January 15, which proved to be the low settlement price for the year. From there silver prices rose steadily throughout 2009, reaching a high for the year of $19.33 on December 2 and ending the year at $16.85. Silver prices rose further in early 2010, touching $18.82 in January.

CPM said The Silver Yearbook puts events in the 2009 silver market into the context of the aftermath of the financial crises and global recession that emerged in 2008. The freezing up CPM Group said in the credit markets led to a massive liquidation by investors around the world of assets. Silver was no exception to this move, CPM said.

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